Verisk: Reconstruction Costs in U.S. Rose 5.2% from Last Year

Total reconstruction costs in the U.S. rose by 5.2% from July 2023 to July 2024.

That’s a large increase from the cost growth from July 2022 to July 2023 (4.0%) and over the cost growth in the second quarter (1.6%), which Verisk released in its 360Value Quarterly Reconstruction Analysis for Q3, which provides reconstruction cost trends at the national and state levels.

The total reconstruction costs include materials and retail labor.

The analysis shows total residential costs increased 4.9% from July 2023 to July 2024 and 1.4% from April 2024 to July 2024.

Residential reconstruction costs increased year over year in all states.

New Hampshire had the largest increase (9.59%), followed by Colorado (9.05%) and Nebraska (6.37%). Nevada went from having the lowest cost increase in April 2024 to the 12th-highest in July 2024, with costs up 5.58% in the state year-over-year. South Dakota and North Dakota rose to 5^th and 14th highest. Vermont had the largest drop, going from 8th to 36th place with a residential cost increase of 4.13%. Wisconsin went from 30th to 50th place with a cost increase of 3.54% and Michigan dropped from 14th to 33rd with a 4.19% increase, the report shows.

Other report highlights include:

• Total commercial reconstruction costs increased 5.5% from July 2023 to July 2024 and 1.8% from April 2024 to July 2024. Commercial reconstruction costs increased by at least 3.42% in all states.
• Material costs rose by 4.35% from July 2023 to July 2024. Material cost increases are accelerating compared to 2023: growth from January 2024 to July 2024 has already surpassed the total growth for 2023, increasing 1.75% compared to 2023’s total of 1.20%. If this trend continues, material costs will have an increase of 3% in the U.S. for 2024, more than double 2023’s growth.
• Combined hourly retail labor costs increased by 4.3% from July 2023 to July 2024, a drop from their 6.2% increase from January 2023 to January 2024.
• For the first time in years, materials costs rose more than labor costs: 4.35% for materials vs. 4.31% for labor.